How Export-Led Growth is Hampering Women’s Rights

Wednesday, June 22, 2016 - 10:43

Hundreds of thousands of women go to factories for work every day to make products for export as part of global supply chains. Many of these products end up in major supermarkets, high street and online fashion stores, and electronics goods shops.

Export manufacturing may have created jobs for women, and remains a popular strategy for developing countries to attract foreign investment and foster economic growth. But, sadly, this export-led approach to growth does much more to retrench the inequalities that are at the heart of the problem in the first place. Women are widely exploited and their rights frequently violated, while the economic growth experienced is neither inclusive nor sustainable.

Gender discrimination is reproduced in labour markets

First, let’s look at the issue of women’s rights. Women face discrimination on the basis of their gender in every country in the world. This discrimination limits women’s choices and opportunities, denies them access to skills, assets and resources, sees them endure widespread gender-based violence, and is used as means to silence their voices and control their lives.

That discrimination, which ultimately places less value on women and all that women do, can be particularly pronounced for women living in poverty. Gender overlaps with lesser economic status along with other aspects of identity such as race, ethnicity, sexual orientation, migrant status, and age - to name only a handful.

Now, let’s look at the world of work. Far from being gender neutral, gender discrimination — including stereotypes of what constitutes ‘appropriate’ work for women — is reproduced in labour markets and the workplace. As such, women have fewer opportunities to access decent, secure work where their rights are respected and where they can earn enough to support themselves and their families.

Instead women are concentrated in most poorly paid and insecure forms of employment. In particular this includes low value, low skilled export manufacturing sectors such as garments, electronics and textiles. Low pay is falsely justified on such grounds as that sewing comes ‘naturally’ to women, rather than being an acquired skill, or that women are unlikely to be the primary breadwinners.

Women are also assumed to be more docile and submissive, and so less likely to challenge poor working conditions. In many instances this stereotype is actively reinforced through violence in the workplace, as well as insecure short term contracts that leave women workers in a state of constant precarity and vulnerability.

For example, a workers’ rights activist in Cambodia, where up to 90% of the country’s 600,000 garment workers are women, told ActionAid:

“[A] worker told me… there was so much work for her to do she could not finish… [The supervisor and factor owner] shouted loudly at her and made her cry in front of other workers.”

As in other countries with major female-dominated export-manufacturing sectors, such as Bangladesh, Thailand and China, many of the women taking these jobs are young, poorly educated migrants from impoverished rural areas. These factors leave them all the more vulnerable to exploitation.

And as is the case virtually everywhere, women must frequently combine their long days of toil with a vastly disproportionate burden of unpaid care work. Cooking, cleaning, washing clothes, fetching water, caring for young children, the sick and the elderly — the time and energy needed to undertake these tasks increase exponentially where public services and infrastructure are inadequate.

Unpaid care is another huge factor that limits women’s rights to decent work, to participate in decision-making, and to rest and leisure.

How does all this relate to sustainable economic growth?

Ever since the 1970s, the dominant ‘neoliberal’ approach to economic development driven by wealthy donor countries and power financial institutions such as the World Bank and WTO has been to encourage export-led strategies in countries in the global South, entailing opening up to free trade, dismantling regulations and limiting the abilities of governments to intervene in their own markets.

Competition between developing countries to attract foreign investors is fierce, particularly as they tend to rely heavily on a small number of sectors. Global corporations often move into poor countries for low value aspects of production, such as the assembly of ready-cut garments. This means they can easily switch suppliers or countries if they find a cheaper deal elsewhere, driving costs like wages and good working conditions down, or rapidly withdraw their capital completely in times of crisis. Ever-lower pay and conditions are the main bargaining chips developing countries have, with gender discrimination meaning that women effectively provide the biggest competitive advantage in the sectors into which they have been crowded.

However, an over-reliance on low wage export-manufacturing based on women’s “comparative disadvantage” means that countries effectively de-skill their labour force whilst constraining their potential to compete globally on a broader range of higher quality products. This broadening of the production base, known as “economic diversification”, has been recognised in the Sustainable Development Goals as key to creating decent work opportunities and fostering sustainable growth.

In fact, research by ActionAid has found that gender equality is positively associated with export diversification and quality, even when controlling for GDP per capita and the importance of trade to the economy. Our new briefing, Trading Up, Crowded Out, finds that countries that are more gender equal are associated with an average of up to 72% greater levels of export diversity and, on average, 42% higher levels of export quality.

Diversification and growth are no silver bullets

Neither economic diversification nor economic growth are sufficient to ensure women’s rights are fulfilled, however. All too often, where countries diversify manufacturing, gender discrimination kicks in and women lose out again. One study by feminist economists Sheba Tejani and William Milberg found a significant decline in female manufacturing employment in 21 out of 36 developing countries due to diversification and technological upgrading. Similarly, Naila Kabeer has demonstrated emphatically that economic growth does not automatically lead to greater gender equality.

On the other hand, ActionAid’s initial finding suggests it is possible for countries to diversify their economies whilst retaining or increasing relatively higher levels of gender equality. Whilst there is no direct causal relation and the results should not be overstated — gender discrimination prevails everywhere — the finding raises many questions about the relationship between the two. Our analysis along with the evidence of the negative impacts of diversification also point to the need for any efforts to diversify to be accompanied by robust polices to tackle gender discrimination in labour markets and beyond, to uphold women’s right to decent work – including freedom to organise and engage in collective bargaining, and to recognise, reduce and redistribute their unpaid care work.

These findings point to the need for a fundamental rethinking of our current global model. There is a clear need for expanding countries’ freedoms to pursue their own economic paths, as well as preventing multinationals from fuelling the squeeze on workers’ rights.

The recently launched Sustainable Development Goals contain lofty ambitions around gender equality, decent work, diversification of economies, and ending global inequalities. A new ActionAid briefing,Trading Up, Crowded Out, shows how these issues are intimately linked. It calls for a rethinking of the current global economic model if the SDGs are to be met and women’s economic and wider rights fulfilled. It is vital that the High Level Panel on Women’s Economic Empowerment - convened earlier this year convened by UN Secretary General Ban Ki Moon to help accelerate the excruciatingly slow progress in this critical area – recognises these interlinkages and addresses the structural causes of women’s economic inequality.